Thailand lags in fintech development in Asia

By Suchit Leesa-Nguansuk

Thailand ranks seventh out of 10 Asian countries in terms of regulatory advancement and financial attractiveness on a Taiwanese consulting firm’s FinTech Competitiveness Index.

“Among 10 developed and emerging economies surveyed, Thailand ranked second in the emerging economy group, behind only Malaysia,” said Joy Lin, co-founder of Ceresus, a data-driven customer experience research firm.

Singapore, Hong Kong, Japan, South Korea and Taiwan top the index, followed by Malaysia, Thailand, Indonesia, Vietnam and the Philippines. The index excludes China.

The survey, conducted in October, judges countries on eight aspects: political environment, funding potential, financial attractiveness, talent, regulatory advancement, customer and market constructs like smartphone penetration, innovation ecosystem and business environment.

The Thailand 4.0 policy lays out a solid foundation for the country’s financial technology (fintech) development. Thailand has the potential to leapfrog its early-stage digital banking services and move into integrated digital commerce or value-added fintech services, said Mr Lin, such as fast and convenient cross-border transfers and real-time consumer purchases.

Digital banking penetration in Thailand is close to 19 per cent — far from Taiwan’s 92 per cent and Singapore’s 94 per cent. Credit card usage in Thailand stands at 3.7 per cent, compared with 51 per cent for Taiwan and 31 per cent for Singapore.

But Thailand scores high in terms of regulatory advancement, behind only Singapore, South Korea and Hong Kong. Thai regulators offer a regulatory sandbox for testing and learning about new services, and have forged international collaboration along with the Bank of Thailand and the Monetary Authority of Singapore on fintech cooperation.

In addition, the government has also encouraged the use of ePayment and QR code payment. However, it still has to consider cybersecurity and privacy issues.

Regulators have also kicked off the open application programming interface (API) initiative for the open use of data. “If the Fintech Act is endorsed in 2018, Thailand will be the third country in Asean to have such specialised regulations,” said Mr Lin.

Thailand also has a great variety of innovative fintech startups willing to collaborate with traditional banking systems, rather than work against the industry. At the same time, banks are working with fintechs to bring new services to the market.


Banks needs to increase their data capability, particularly in regard to small and medium-sized enterprises’ (SMEs) credit scoring, whereby transaction data is analysed from their SME customers including turnover, customer profile, inventory and delivery, he said.

There are potential challenges for traditional banks. Global online retail players like Alibaba have strong data capabilities and analytics to understand their customer behaviour and extend loans to suppliers and buyers. Banks still lack this capability.

By making integration of cross border transfer and payment more convenient, Asean banks can more effectively compete with their giant China rivals WeChat and Alipay. Thailand’s PromptPay and PayNow in Singapore are a step in the right direction.

Mr Lin said Thailand can be a regional fintech hub if it can enlist enough talent to work in financial programming, data analytics and data science, areas crucial for fintech development.

Thailand already operates innovative fintech solutions in several areas including payment, alternative financing (such as person-to-person lending), insurance, robot advising, blockchain, personal finance management, and technical services (business-to-business digitised workflow management).